by winston » Wed Nov 19, 2014 10:04 pm
not vested
KL Kepong Q4 earnings slip as oleochemicals unit records losses
KUALA LUMPUR: Kuala Lumpur Kepong Bhd (KLK) recorded net profit of RM170.75mil in the fourth quarter ended Sept 30, 2014, down 33.8% from RM258mil a year ago due to losses incurred by its manufacturing sector caused by reduced margins while the oleochemical division sank into losses.
KLK said on Wednesday pre-tax profit fell 28.3% to RM238.62mil from RM332.70mil a year ago despite 15.0% improvement in revenue to RM2.778bil from RM2.415bil.
Earnings per share were 16 sen compared with 24.2 sen. It declared an interim dividend of 40 sen a share.
KLK’s manufacturing sector incurred a loss of RM9.4mil compared with the profit of RM105.9mil a year ago. However, the revenue was up 13.7% to RM1.415bil compared with RM1.245bil a year ago.
The current quarter's performance was impacted by reduced margins due to weak oil prices and had necessitated the write-down of stocks.
“The oleochemical division reported a loss of RM13.4mil compared with a profit of RM92.30mil a year ago. The other manufacturing units achieved a profit of RM4mil compared with RM13.60mil a year ago,” it said.
Its plantations profit climbed 10.9% to RM236.40mil from RM213.20mil a year ago due to an increase in fresh fruit bunches (FFB) production, drop in production cost and higher selling price of palm kernel.
However, the declining oil prices had pressured margins, resulting in negative contributions from the refineries and kernel crushing plants.
For the financial year ended Sept 30, it earnings rose 8% to RM991.70mil from RM917.74mil. Revenue rose 21.6% to RM11.13bil from RM9.147bil.
KLK said the plantations sector posted a profit of RM1.011bil, up 27.8% from the RM791.20mil a year ago.
“Despite the negative contributions from refineries and kernel crushing plants and lower profit from rubber sector, the improved results were due to better CPO and palm kernel selling prices; reduction in production cost and increased sales volume of CPO and palm kernel,” it said.
KLK’s manufacturing sector recorded a 14.2% decline with profit to RM274.80mil from RM320.30mil a year ago although revenue improved 20.0% to RM5.634bil compared with RM4.697bil a year ago.
“After a strong performance in the first half year, the bearish oil prices and weak market sentiment in the second half year had destabilised the overall demand pattern. The sharp drop of oil prices in the fourth quarter had impacted margins and resulted in stocks write-down. However, the better performance from European operations through higher volumes had mitigated the decline in profit,” it said.
On the prospects, it said CPO was trading between RM2,200 and RM2,300 a tonne aided by the temporary exemption of export duty, a weak Ringgit and restocking by large consuming countries.
“However, the impending large soybean harvest in the US and the low petroleum prices, which affect bio-diesel demand, are putting a resistance for further rise in prices.
“In view of the above factors and the prevailing palm products prices, the plantations profit for the current financial year is expected to be satisfactory albeit lower than that of the previous financial year,” it added.
KLK pointed out that for the oleochemical division, the weak oil prices would continue to pressure margins.
“However, with the increased capacities arising from the new plants coming on-stream together with the continuous drive for operational efficiencies and productivity improvement, this division expects reasonable profits for the current financial year,” it said.
Source: The Star
It's all about "how much you made when you were right" & "how little you lost when you were wrong"